Bitcoin miners are currently struggling, especially leveraged miners.
The recent FTX and Alameda crashes have led to a downturn in the entire cryptocurrency market. The price of Bitcoin has fallen about 20% from $20,000.
Leveraged miners mortgage their mining machines to ensure debt financing, which is good in a bull market. However, as prices fall and profit margins are squeezed, these miners accumulate debts that are difficult to bear interest on, and may eventually face default and liquidation.
The hash price of Bitcoin miners has fallen to a historical low of $58,300 EH per day, which is close to the shutdown price of many mining machines.
There is likely to be another Bitcoin miner surrender, just like the surrender shown in the gray bar in the following figure due to the collapse of LUNA recently.
Under the influence of FTX and Alameda, Bitcoin miners allocated an additional 8,250 Bitcoins to support their balance sheets. This left miners with only about 78,000, offsetting all their balance growth in 2022.
Core Scientific Inc., the largest publicly traded Bitcoin mining company in the United States, reported a loss of $1.7 billion in the first nine months of this year. The company expects its existing cash resources to be exhausted by the end of 2022 or earlier.
Another Bitcoin miner, Iris Energy, recently shut down most of its mining machines in response to a default notice for a $107.8 million loan. The company previously stated that given the current market conditions, it earns insufficient profits to pay off its debts, generating only $2 million in gross profit per month while having a debt obligation of $7 million.
